Education company Lincoln Educational (NASDAQ:LINC) reported revenue ahead of Wall Street’s expectations in Q1 CY2025, with sales up 13.7% year on year to $117.5 million. The company’s full-year revenue guidance of $490 million at the midpoint came in 1.2% above analysts’ estimates. Its GAAP profit of $0.06 per share was significantly above analysts’ consensus estimates.
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Lincoln Educational (LINC) Q1 CY2025 Highlights:
- Revenue: $117.5 million vs analyst estimates of $115.9 million (13.7% year-on-year growth, 1.4% beat)
- EPS (GAAP): $0.06 vs analyst estimates of -$0.04 (significant beat)
- Adjusted EBITDA: $10.64 million vs analyst estimates of $7.21 million (9.1% margin, 47.4% beat)
- The company lifted its revenue guidance for the full year to $490 million at the midpoint from $485 million, a 1% increase
- EBITDA guidance for the full year is $60.5 million at the midpoint, above analyst estimates of $56.89 million
- Operating Margin: 2.9%, up from -0.4% in the same quarter last year
- Free Cash Flow was -$28.27 million compared to -$16.62 million in the same quarter last year
- Enrolled Students: 15,904, up 2,103 year on year
- Market Capitalization: $660.9 million
“We delivered a strong start to 2025 with exceptional student start growth, double digit revenue growth and a 63% increase in adjusted EBITDA,” said Scott Shaw, President and CEO.
Company Overview
Established in 1946, Lincoln Educational (NASDAQ:LINC) is a provider of specialized technical training in the United States, offering career-oriented programs to provide practical skills required in the workforce.
Sales Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Lincoln Educational grew its sales at a 10.1% annual rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the consumer discretionary sector, which enjoys a number of secular tailwinds.
We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Lincoln Educational’s annualized revenue growth of 13.4% over the last two years is above its five-year trend, but we were still disappointed by the results. 
We can better understand the company’s revenue dynamics by analyzing its number of enrolled students, which reached 15,904 in the latest quarter. Over the last two years, Lincoln Educational’s enrolled students averaged 9.5% year-on-year growth. Because this number is lower than its revenue growth during the same period, we can see the company’s monetization has risen. 
This quarter, Lincoln Educational reported year-on-year revenue growth of 13.7%, and its $117.5 million of revenue exceeded Wall Street’s estimates by 1.4%.
Looking ahead, sell-side analysts expect revenue to grow 10.6% over the next 12 months, a slight deceleration versus the last two years. This projection doesn't excite us and indicates its products and services will see some demand headwinds.
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Operating Margin
Lincoln Educational’s operating margin has shrunk over the last 12 months and averaged 6.3% over the last two years. The company’s profitability was mediocre for a consumer discretionary business and shows it couldn’t pass its higher operating expenses onto its customers.
In Q1, Lincoln Educational generated an operating profit margin of 2.9%, up 3.3 percentage points year on year. This increase was a welcome development and shows it was more efficient.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Lincoln Educational’s EPS grew at a remarkable 17.4% compounded annual growth rate over the last five years, higher than its 10.1% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
In Q1, Lincoln Educational reported EPS at $0.06, up from negative $0.01 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Lincoln Educational to perform poorly. Analysts forecast its full-year EPS of $0.39 will hit $0.42.
Key Takeaways from Lincoln Educational’s Q1 Results
We were impressed by how significantly Lincoln Educational blew past analysts’ revenue, EPS, and EBITDA expectations this quarter. We were also excited it lifted its full-year guidance. Zooming out, we think this was a good print with some key areas of upside. The stock traded up 6.9% to $22.36 immediately following the results.
Lincoln Educational may have had a good quarter, but does that mean you should invest right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.